Institutional shareholders voting against several resolutions proposed by managements

New Delhi: Shareholder meetings in the financial year 2022-23 saw a surge in advocacy by institutional shareholders who made their voices heard by voting against several resolutions proposed by managements. 

The number of resolutions where more than 20 per cent of institutional shareholders expressed their dissentincreased by a huge 44 per cent to 1833 in 2022-23 in companies listed on NSE from 1256 in 2021-22 (and 636 in 2020-21), according toPrimeinfobase, an initiative of Prime Database Group.

According to Pranav Haldea, Managing Director, Prime Database Group, like in previous years, most of such resolutions related to board changes and remuneration, specifically ESOPs.

According to Haldea, this reflects an increase in advocacy on the part of institutional investors, which is on account of the facility of e-voting being made mandatory a few years back as also the stewardship codes brought about by regulators. It is also attributable to a greater role being played by proxy firms as also a steady increase in institutional holding as a whole.

Resolutions where more than 20 per cent of Institutional Shareholders cast a negative vote,for companies belonging to Nifty 50also increased by 35 per centto 73 in number as compared to 54 last year.

There were102 resolutions which were completely voted againstby shareholdersat AGMs/EGMs/Postal Ballots and Court/NCLT Convened Meetings held in 2022-23,an increase of 42 per cent from 72 resolutions in the previous yearand 48 resolutions in 2020-21.

Of these 102 resolutions, 21 were re-proposed to be passed, out of which 18 resolutions eventually passed while three of them failed again.

As many as 1,005 resolutions pertaining to related party transactions (RPTs) were proposed in 2022-23, more than double of the 474 such resolutions in 2021-22.While 102 or 10.15 per cent of these resolutions were voted against by more than 20 per cent of institutional investors, just 16 or 1.59 per cent of such resolutions were defeated.

(Sanjeev Sharma can be reached atSanjeev.s@ians.in)

–IANS